[News] Tesla Reportedly to Invest KRW 1.1T to Secure Samsung Electro-Mechanics Substrate Capacity; NVIDIA Also Commits

Samsung Electro-Mechanics is reportedly set to receive a combined KRW 3.7 trillion in investment from Tesla and NVIDIA to expand advanced chip substrate production, as growing AI demand drives capacity expansion across the supply chain. According to Maeil Business Newspaper, citing industry sources, the company has signed a long-term flip-chip ball grid array (FC-BGA) substrate supply agreement with Tesla and is expanding dedicated production lines at its Sejong facility.

The substrates are expected to be used in AI chips for Tesla’s autonomous electric vehicles and Optimus humanoid robots under a five-year agreement running from 2029 through 2033. Tesla will contribute approximately KRW 1.1 trillion toward the expansion in exchange for guaranteed substrate supplies. The funding forms part of Samsung Electro-Mechanics’ KRW 4.27 trillion Sejong investment plan disclosed in September, the report notes.

Construction of the new FC-BGA substrate production facilities at the Sejong plant is expected to be completed by the end of 2027. Equipment installation and trial operations are scheduled for the first half of 2028, followed by mass production in the second half. Deliveries to Tesla are expected to begin in 2029.

NVIDIA Expands Global Substrate Capacity Through Supplier Partnerships

NVIDIA is also working with major suppliers to expand its global substrate capacity. According to TechNews, the company aims to increase its total IC substrate capacity to 2.5 times its current level over the next three years through a series of supply agreements. In Japan, NVIDIA has committed billions of dollars in capacity reservation prepayments to Ibiden, whose Ono plant aims to triple production capacity, with additional output expected to begin ramping in the first quarter of 2028.

In South Korea, Samsung Electro-Mechanics is expanding its Sejong and Busan facilities, with NVIDIA expected to account for a significant share of its annual package substrate capacity by 2028. While NVIDIA did not disclose an investment amount in its announcement, Maeil Business Newspaper reports that the commitment is believed to be worth approximately KRW 2.6 trillion. Meanwhile, NVIDIA is supporting Taiwan’s Unimicron in expanding its KF substrate capacity through a capacity reservation agreement, with additional output expected from the second quarter of 2027 and full capacity targeted by mid-2028, according to TechNews.

Separately, Samsung Electro-Mechanics disclosed a KRW 360.5 billion contract on October 19 to supply memory semiconductor package substrates to an undisclosed global customer throughout 2027. The company did not identify the customer, citing business confidentiality, according to Chosun Biz.

The broader expansion comes as high-end FC-BGA production remains concentrated among a handful of suppliers, including Samsung Electro-Mechanics, Japan’s Ibiden, and Taiwan’s Unimicron. Industry estimates cited by Maeil Business Newspaper put Ibiden’s market share at more than 70%, with Samsung Electro-Mechanics working to narrow the gap.

Read more

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(Photo credit: Samsung Electro-Mechanics)